shaking hands

The do’s and don’ts after acquiring a business

To keep or not to keep?

Acquisitions can be an incredible boost for a growing business – you instantly add scale, expertise and assets and move into a desirable new territory, product or service.

Having been through many business acquisitions, we’ve seen how the effect can be transformative.

However, whether it’s a merge of equals or a takeover of a smaller entity, it’s rare for separate businesses to slide together seamlessly like a zipper. Expect a few snags, whether in workplace cultural adjustments, adding physical space to fit your expanded team, or resolving professional or personal differences.

No business leader enjoys letting people go, and in a difficult hiring market, it’s not a decision you take lightly. Yet, in the aftermath of an acquisition, sometimes, that’s exactly what’s needed to create the right fit for a team, eliminate duplicate roles, or make sure everyone in your new team is singing from the same song sheet. There’s no point in keeping people around to put bums on seats.

The culture issue

As part of your pre-acquisition due diligence, you should look at more than just the balance sheet and revenue projections. A key consideration is the target business’s workplace culture.

Talk to people at all levels of the business to get a holistic view of the way they operate. Alternatively, hire a consultant to ask some key questions about their practices. What are their ethics, their drivers, and how do they treat each other and their customers? Are there people who are pulling in a different direction than everyone else?

It’s important to recognise that this isn’t a ‘my way or the highway’ scenario. As business leaders, we don’t ever expect everyone to always agree, but we do expect alignment on the company’s direction and how to get there.

Take a moment to listen to opposing views. Can we learn something that makes our combined business stronger? If not, maybe you’ve uncovered a red flag in need of a quick solution.

Work from the top down

Culture inevitably flows from the top, so if the acquired company’s way of working isn’t sympatico with your own, the first job on day one might be to remove the leadership and bring remaining new hires under your own rules of engagement.

For the sake of everyone involved, it’s often advantageous to act quickly: decisive action shortens the transition period, bedding down a quick reset on culture and practices.

However, there are exceptions. Inevitably when you begin consolidating roles and culling people, experience is lost to the business. For example, a reduction in customer-facing roles could sever a key connector to the very clientele you acquired that business to reach. Will customers still get the attention they’re used to? Make sure that in solving immediate problems with staffing and culture-led decisions, you’re not creating even bigger ones that will bite you later.

Acquisitions don’t always necessitate a full merge or takeover. If the business you bought is complementary to your own and there’s little or no crossover, you might keep both businesses largely intact – a leadership change might still be advantageous, plus some consolidation of administrative roles, for example.

Getting settled

It’s inevitable that in the wake of most acquisitions, change will be a constant for some time. New staff will need to settle in and find their place under the merged structure. You’re often refocusing and right-sizing the business units to eliminate duplication, relocating complementary roles to sit together, and aligning them to new business goals and cultural thinking. Unlike establishing leadership principles from day one, this process can take months or even years to shake out.

And finally, we’ve found that strong and frequent communication is vital. Your team need to understand where you’re going, how you plan to get there, and what role they will play.

Change is hard, and making difficult choices is mandatory, but in my experience, a team united by a shared vision will go on to produce extraordinary results.

Define your success with Salisburys

Salisbury’s Business Coaching Program has been designed and developed to assist business owners with the support and guidance they need to achieve their own definition of success.

Tailored for each business, our program provides business owners with the support structure and key tools they need to achieve their goals while holding them accountable for achieving these goals in the agreed timeframes.

Read more here or call Salisbury’s Business Advice team in Albury on 02 6041 3014.

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Source: Dynamic Business